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Introduction:

The ITR-4 Form serves taxpayers who choose the presumptive taxation scheme under Sections 44ADA, 44AD, and 44AE of the Income Tax Act. This comprehensive form comprises three main sections, Part A, Part B, and Part C, supplemented by several schedules.

This section provides a comprehensive overview of the ITR-4 (Sugam) form’s structure and offers guidance on filing your ITR 4.

ITR 4 Form: 

The ITR 4 Sugam Form is designed for taxpayers eligible to utilize the presumptive income scheme outlined in Sections 44AD, 44ADA, and 44AE of the Income Tax Act.

Please be aware that individuals whose businesses generate an annual turnover exceeding 2 crores are ineligible to file ITR 4.

Eligibility to File ITR-4:

ITR 4 is applicable to individual taxpayers, Hindu Undivided Families, or partnership firms meeting the following criteria:

• Any income derived from a profession, computed in accordance with the provisions outlined in Section 44ADA.
• Income from other sources not exceeding Rs. 50 lakh (excluding income from lotteries and horse racing).
• Business income as per the provisions of Section 44AD or 44AE.
• Income from salary or pension does not exceed Rs. 50 lakhs..
• Income from a single house property up to Rs. 50 lakh (excluding any brought forward losses or losses to be carried forward).
• Any freelancer earning up to Rs. 50 lakh is also eligible to use ITR-4.

Not Eligible to File ITR- 4: 

Below are categories of individuals exempt from filing ITR 4.

• An individual who serves as a Director of a Company and/or holds investments in unlisted equity shares.
• An individual with income, profits, or gains from businesses that do not fall within the scope of the presumptive tax scheme outlined in Sections 44AD, 44ADA, and 44AE of the Income Tax Act.
• An individual with an account, financial asset, or source of income situated outside India.
• A person whose income from salary, house property, or other sources exceeds Rs 50 lakh.
• A person earning income from winning lotteries or owning racehorses.

Structure of  ITR 4: 

Before learning how to file ITR 4, it’s crucial to understand the structure of this form. The ITR 4 Form is divided into three parts.

 Part A:

Here, you are required to provide general information, including PAN, name, etc.

 Part B:

This part encompasses details regarding gross total income.

Part c:

Here, you must furnish details regarding deductibles and total taxable income.

Additionally, the ITR 4 Form includes the following schedules:

• Schedule IT requires you to provide details about Self Assessment Tax and Advance Tax.
• In Schedule TCS, you are required to provide data regarding taxes collected at the source.

• In Schedule TDS 1, you need to input details about the TDS deducted from your salary as per Form 16 issued by your employer.
• Schedule 80G requires details regarding the total deduction amount you intend to claim for donations to charitable organizations under Section 80G.
• Schedule BP of the ITR 4 Form encompasses details of the following:
• Calculation of presumptive professional income under Section 44ADA.
• Details regarding turnover or gross receipts as reported in GST.
• Financial particulars of the business.
• Calculation of presumptive business income under Section 44AD.
• Computation of presumptive income from goods carriages as per Section 44AE.

Presumptive Taxation Scheme : 

Understanding presumptive taxation schemes is crucial for anyone required to file ITR-4. According to the IT Act, individuals in certain businesses or professions must maintain books regularly and undergo account audits. To alleviate the burden on small taxpayers, the government introduced the presumptive taxation scheme under sections 44AD, 44ADA, and 44AE.

Here are some key features of this scheme:

• Business owners must pay the entire Advance Tax by March 15 and are not required to make quarterly installments of the Advance Tax on the specified due dates.

• The net income is calculated as 8% of the gross cash receipts. For payments received digitally, the net income will be 6% of the gross receipts.

• In a presumptive taxation scheme, there is no requirement to maintain books of accounts.

The three sections under the Income Tax Act that provide the presumptive taxation scheme have been thoroughly discussed.

• Section 44AD: According to this section, small taxpayers with a business turnover of less than Rs 2 crore can choose the presumptive tax scheme. Such businesses are exempt from maintaining books, and their profits are presumed to be 8% of their total turnover.

• Section 44AE:Owners of small businesses engaged in plying, hiring, or leasing up to 10 goods carriages can avail themselves of the benefit of the presumptive tax scheme under this section.

• Section 44ADA: This section provides a special provision that can be utilized by professionals whose business has an annual gross receipt of up to Rs 50 lakh.

How to File ITR 4: 

You can file the ITR 4 Form either offline or online. Here’s a guide on how to file ITR-4 using both methods:

Online: 

You can electronically file ITR-4 through any of the following methods:

• By electronically providing the information and submitting the return verification via Form ITR-V (In this method, you need to sign the form and send it to the IT Department’s CPC office within 120 days of filing).

• By electronically filing the return with a digital signature (If you file ITR 4 electronically with a digital signature, you will receive the acknowledgement in your registered email address. Alternatively, you can also download it from the website of the Income Tax Department.)

• Note that taxpayers are not required to attach any documents along with Form ITR-4.

Offline: 

You can file ITR 4 offline through any of the following methods:

• By submitting a bar-coded return.
• By physically filing a return using paper forms.
• The IT Department will issue an acknowledgement upon the submission of the ITR physically.

Conclusion:

If you are a taxpayer under the presumptive taxation scheme and need to file ITR 4, refer to the above sections. Ensure accurate submission of all necessary information in the relevant parts and schedules of the form to avoid complications.